Is taxing sugar the answer to obesity?

Here’s a recipe for a communications challenge. Bring rapidly to the boil one Jamie Oliver, spiced with the Government’s NHS austerity drive. Mix vigorously with interventionist public health campaigners and season with a large dose of political correctness. Do not under any circumstances sweeten the mix.

What should quickly result is a populist campaign to make the sugar industry a pariah to rank alongside tobacco, alcohol, fast food and gun makers.

Some dieticians even recommend cooking up a special tax on food and drink containing high levels of sugar – though Prime Minister David Cameron favours other culinary approaches for now.

Sugar is a comparatively recent target for food activists, who have hitherto focused on makers of fatty foods.

However, the sugar industry now finds itself having to learn a conundrum of modern capitalism that means healthy revenues and profits offer little protection to companies finding themselves on the blacklists of the politically-correct.

Oliver is at the front of the anti-sugar movement, leading a personal campaign and endorsing a Public Health England (PHE) report released in October that calls for a tax of between ten and 20 per cent on high-sugar foods and drinks.

The study claims the NHS could save £15 billion and as many as 77,000 lives over the next 25 years by taking measures to wean the public off its sweet tooth.

Warning that today’s children and teenagers are consuming three times their recommended level of sugar, with adults faring almost as badly, it says 24 per cent of adults, 19 per cent of ten to 11 year-olds and ten per cent of four to five year olds in England are obese.

It notes that higher taxes on sugary foods have worked in several other countries, with some methods reducing consumption of fizzy drinks by up to one quarter.

The report also calls for a reduction in price promotions of sugary foods in all shops and restaurants and a clampdown on TV advertising of sugar products.

Public Health England wants new rules on marketing sweets, chocolate and fizzy drinks, banning them from supermarket till areas and end-of-aisle positions. It is also calling for changes in the way food is produced and sold, to reduce sugar content and portion sizes.

However, it concludes that a ban on advertising of junk foods during family television viewing, and restrictions on marketing and cut-price promotions could do more than a sugar tax to address Britain’s bulging waistlines.

Oliver, who still believes a sugar tax is a possibility, hailed the report as ‘courageous’ and ‘forward-thinking’. It was also welcomed by the British Medical Association, which is in favour of a sugar tax.

But the campaign group Action on Sugar believes that a sugar tax would lead to the food industry reformulating products to drive down sugar content, pointing out that such an approach with salt has not reduced food sales.

Other health experts have suggested that sugar should be treated in the same way as tobacco, with punitive taxes and some products only sold behind shop counters.

Some support has also come from within the food and drink industry interests, with some niche brands including Camino, a Canadian brand of Fairtrade, and organic food products, coming out in favour of adding a levy to soft drinks.

Results from other nations look ominous for the UK sugar industry, with a recently introduced ten per cent tax on sugary drinks in Mexico prompting a ten per cent year-on-year drop in purchases in the first three months while Coca-Cola Femsa, the country’s biggest soft drink bottler, saw drinks sales fall by 6.4 per cent. (Mexico is Coca-Cola’s second biggest market by volume sales; Mexicans used to drink, on average, 163 litres of fizzy drinks – 43 gallons – every year, which is 40 per cent higher than Americans.)

So how should the sector respond? Should it be proactive with its communications strategy, fighting battles such as a sugar tax that may never actually come about?

Or should the industry accept that the ‘good’, comparatively unregulated, times are over and move with the flow?

Some figures in related sectors have already taken contrary positions to Oliver’s, with Tim Martin, chief executive of pubs chain JD Wetherspoon, lambasting the anti-sugar campaign as ‘showboating’, claiming it risks costing pubs millions of pounds and causing further closures at a time when pub prices are already high compared to supermarkets.

Martin says: ‘Jamie Oliver runs restaurants which cater to an affluent clientele. He is either courting the favour of the elite or badly out of touch with the majority of people.

‘I believe that he should campaign for tax equality for pubs, restaurants and supermarkets, since pubs and restaurants pay 20 per cent on food sales, compared to zero for supermarkets.’

Oliver’s campaign has also been hit by newspaper stories analysing the surprisingly high sugar content of some of the meals on offer in his Jamie’s Italian restaurant chain.

However, the fight back by the sugar industry also includes Making Sense of Sugar, a proactive initiative funded by sugar manufacturer AB Sugar, part of Associated British Foods.

The campaign involves a website with sections on healthy eating and living, general health, including obesity, diabetes and dental care, and the history, composition and use of sugar.

There is also a blog dedicated to spreading knowledge about the role sugar can play as part of a balanced diet and lifestyle, which features contributions from chefs and dieticians.

Subtitled Getting the balance right the site says its raison d’etre is to ‘help inform and educate people about sugar and the role it can play as part of a healthy balanced diet’, providing ‘factual information based on robust science for everyone so that we can all make informed choices about what we choose to consume’.

Recent blog posts have included an article about The Great British Bake-off victor Nadiya Hussain, understanding obesity and establishing healthy eating habits in children.

Judith Moore, director of PR agency Fishburn, which developed the campaign for the company, says it set out to be accessible and straightforward.

‘The centrepiece of our campaign was to provide information and communications in a very factual way so that people can make their own decisions about sugar,’ she adds.

Premier Foods, which makes Mr Kipling cakes as well as a range of sugary desserts, also aims to take the initiative on the sugar issue, according to corporate affairs director Richard Johnson.

‘The approach we try to take is to be very proactive,’ he says. ‘The whole sugar and obesity issue is one of the biggest issues in the entire food industry and will continue to be so for some time.

‘It is very clear that we have to handle it here. There’s no question of us lying low hoping that the issue goes away.’

The approach of Premier, which is unsurprisingly opposed to a sugar tax, is to focus on its products and try to find more acceptable ways of sweetening them.

It has set itself a three-year target to reduce the amount of sugar used in its products by about five to ten per cent each year. It currently uses about 20,000 tonnes of sugar a year.

In addition, it is changing portion sizes and the formulae of its products so that an ‘every day cake’ does not exceed 150 calories. Currently, this can range between 150 to 200 calories.

Premier also claims to have pioneered traffic light-style warning imagery on cake and dessert packaging and says it would have no objection to the Government making their use mandatory.

The ultimate solution, says Johnson, will most likely involve technology and innovation, with one potential option being to develop a sweetener using Stevia, a plant extract that is blended with sugar to make the Coca-Cola Life drink. Stevia, however, is currently not approved for use in cakes and desserts.

‘It’s hard. We cannot make cakes without sugar. The main technological challenge is doing that in a way that people want,’ adds Johnson. ‘Cakes are a treat. There’s no point anyone making cakes that nobody wants to eat.’

Other food categories are easier, though sugar finds its way into some expected products.

Dairy group Arla Foods UK, for example, says it made copious efforts to choose formulations that are not heavy in sugar when it launched into yoghurt and yoghurt drinks earlier year.

‘Sugar doesn’t really feature high on our watch list because there’s not a lot of it in dairy products,’ says communications director Lisa Attenborough. ‘But we still take it very seriously and do what we can.’

The Food and Drink Federation (FDF), meanwhile, is promoting the work its industry is already doing to tackle childhood obesity.

‘Steps are already in hand to ensure that high fat, salt and sugar foods will not be advertised to children,’ says director general Ian Wright, who previously worked as director of corporate relations at spirits group Diageo.

‘Likewise, the industry has already removed millions of calories from the food chain and will continue to make progress on this through reformulation and changes to portion and pack sizes.

‘It may also be possible, by negotiation, to improve the definition of ‘high sugar foods’. However, we do not agree that the international evidence supports the introduction of a sugar tax and for this reason would oppose such a move.’

Campaigns such as People Against Sugar Tax (PAST), set up on libertarian grounds by former Conservative councillor Brook Whelan, want the sugar industry to go further.

‘The first battleground here is about freedom of choice,’ says Alex Deane, managing director of PR agency FTI Consulting and an executive board member of the PAST campaign.

‘We know that sugar is not good for you. We’re not claiming that it is but individuals have freedom to choose what they eat and drink. Secondly, a sugar tax would be regressive, affecting poor people more than anybody else.

‘Slapping tax on foodstuffs will not affect wealthy people but it will impact significantly on the grocery budgets of those who can afford it the least. The poorer the people, the more harm that a sugar tax would inflict.’

Deane believes companies need to improve nutritional labelling, fund national exercise programmes and sponsor after-school sports clubs as part of their corporate social responsibility programmes.

‘We’re miles behind the anti-sugar lobby and the paternalist and nanny state agenda,’ he says.

‘For every one of us, there are ten Jamie Olivers better financed than us and with a higher profile who take up the paternalist position on diet.

‘But people always under-estimate the ability of the public to change minds on issues. I am cautiously optimistic.

‘If we can give politicians enough pause for thought, sufficient reasons to think that they shouldn’t do this and should put their firepower somewhere else, then I believe we can persistently keep this off the agenda.’

That would be a major victory but it doesn’t take a Great British Bake-off to decide that sugar in food and drink is a topic that’s here to stay.

‘There’s a lot of criticism out there,’ says Johnson, ‘but this is an industry issue. It’s not particular to this company. It’s something that the whole industry has to deal with.’

COUNTRIES WITH SUGAR TAX

Mexico

Type: Tax on high calorie foods and drinks with added sugars

Introduced: 1 January 2014

Amount: Ten per cent (one peso per litre of sugary drinks)

Why: Mexico has the second highest level of obesity in an adult population, among the OECD countries, and 34 per cent of its children are registered as overweight or obese.

What happened: Sugary drinks sales fell 12 per cent within a year, and water consumption rose four per cent.

Why: The government spends approximately five per cent of its gross domestic product every year on fighting diabetes and high blood pressure; 64 per cent of its adult population and 31 per cent of its children are registered as overweight or obese.

Chile

Type: An 18 per cent ad valorem tax is applied to drinks with sugar content greater than 6.25g of sugar per 100ml. Sugary drinks with less than 6.5g per 100ml are taxed at ten per cent.

Food manufacturers must also put warning labels on food that is high in sugar, salt, calories or fat. Advertising unhealthy products to children is also banned.

Introduced: 1 January 2015

Why: Chileans spend roughly 63 per cent of their food budgets on packaged foods, and seven out of ten adults and about 30 per cent of children are registered as overweight or obese.

France

Type: A tax of Eu7.16 per hecto-litre applies to all drinks with added sugar or with artificial sweeteners

Introduced: 1 January 2012

Why: More than 20 million French people are overweight, including seven million who are clinically obese, according to France’s National Institute for Health & Medical Research; the figure is double that recorded 14 years ago.

What happened: Sales of sugary drinks fell four per cent, while sales of bottled water increased 1.6 per cent in the first year.

But this has not continued. Sales volumes rose by 0.5 per cent in 2013, and by 6 per cent in the first quarter of 2014. Some producers may not be passing on the tax to consumers.

Public support for the sugar tax rose to more than 60 per cent when the government announced its revenue would be used for health expenditure.

Dominica

Type: A ten per cent excise duty on food and drinks with a high sugar content

Introduced: 1 September 2015

Why: Prime minister Roosevelt Skerrit said the move was aimed at curbing the incidence of chronic non-communicable diseases, such as colon cancer.

What happened: Revenues from the tax will contribute to a national Get Healthy campaign.

Finland

Type: An excise tax of 22 cents per litre on sugar-containing soft drinks, and 11 cents per litre on sugar-free soft drinks and mineral waters, plus a 95 cent tax per kilo of confectionery

Introduced: 1 January 2011

Why: Finns love sugar, consuming on average 91.5 grams per day – almost double the World Health Organisation’s recommended intake of 50 grams, although the nation has below average obesity levels.

What happened: Sales of confectionery initially fell before stabilising at levels seen at the time that the levy was imposed, but sales of sugary drinks have fallen. They declined more than four per cent in 2013.

But the tax on sweets and ice cream will be scrapped in 2017 after the European Union complained that it unfairly discriminated against foreign manufacturers, who must also pay import duties.